Ethanol

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Monday, Jan. 5, 2009 12:39 AM

There are few places in the U.S. economy that have remained untouched by recent downturns and meltdowns, and the ethanol market - once hailed as a clean, renewable domestic energy source that could rival foreign oil's dominance in meeting U.S. energy needs - is no exception. While Colorado's involvement in ethanol production has been correspondingly affected, it has been less so than in other places across the nation. There are, however, some silver linings in the slowdown.

In Colorado, five ethanol plants are staying afloat thanks in part to the facilities' close proximity to the corn supply needed to generate the fuel as well as buyers for the grains left over after production. That system helps to offset the challenges that have forced ethanol plants across the country - almost two dozen - to close: rising corn costs - though those have now stabilized - dropping oil prices, and tightening credit markets. Nevertheless, ethanol's growth as an economic driver in Colorado has fallen below the rosy projections when ethanol was being billed as a new energy panacea. That may be just fine.

By slowing the rate and fervor with which ethanol production is developed, proponents and skeptics alike can take more time to study all the repercussions of the technology. While ethanol has been touted as a clean energy source - when it burns, it produces fewer emissions than gasoline - when considering production of the fuel as a whole, it is a far murkier picture. Those concerns, along with criticism that using corn to produce fuel drives up the cost of one of the most important - and widely used - food sources on the planet, make corn-based ethanol less than ideal as an alternative to oil dependence.

The economic factors that have slowed the ethanol rush can provide the opportunity to more thoroughly examine the best way to produce the clean fuel at the least cost - economic, environmental and otherwise. Already there are efforts to develop technology that derives biofuels from marine algae - including plans to build a facility near Ignacio, as well as louder cries for and closer looks at using switchgrass or forest and agricultural waste to generate the gas. By using a wider lens to view the potential for ethanol, its growth as an alternative to fossil fuels, clean energy developers can more easily overcome the obstacles that have stymied corn-based ethanol's projected rapid growth.

It is important, though, to not let falling oil prices derail that effort. While the cost per barrel of oil has fallen dramatically since the summer, it would be foolish to believe that prices will stay that low indefinitely - nor is that sufficient reason to abandon work to wean the world away from its fossil fuel dependence. Instead it should provide motivation to find even cheaper and cleaner ways of producing alternative fuels that can in turn inject some life into flagging economies across the country.

As problematic as corn-based ethanol production can be, it embodies the innovation necessary for developing a broader menu of energy options. What must happen now is energy producers and lenders must take an even longer view. The investment will yield many beneficial returns.